Correct HSN Code and Tax Rate for "Energy-G premium oil" clarified by Authority for Advance Ruling.

The Authority for Advance Ruling determined that the correct HSN Code for the "Energy-G premium oil" is 1518, subject to a 5% Central Sales Tax, based on the manufacturing process and raw materials used. This classification aligns with Notification No. 1/2017-Central Tax (Rate), specifying the product's categorization under "Vegetable fats and oils." The ruling clarified the tax treatment, establishing compliance with the applicable regulations.

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Issues:
1. Clarification of Correct HSN Code for "Energy-G premium oil"

Analysis:
The case involved M/s Agarwal Industries Private Limited seeking an advance ruling on the correct Harmonized System Nomenclature (HSN) Code for their product "Energy-G premium oil." The applicant claimed that the product falls under HSN Code 1518 of Schedule 1, attracting a tax rate of 2.5%. However, after reviewing the application and the manufacturing process details provided, it was determined that the product is manufactured from vegetable fats/oils, not animal fats/oils. As a result, the correct classification of the product was found to be under HSN 1518, subject to a 5% Central Sales Tax (CST) as per the relevant notifications.

During the proceedings, the applicant's representative attended a personal hearing and argued that the "Energy-G premium oil" should be classified under HSN Code 1518 based on Notification No. 1/2017-Central Tax (Rate). The notification specified that the product should be classified under "Vegetable fats and oils and their fractions" excluding certain categories. The applicant contended that their product met the criteria outlined in the notification for classification under HSN 1518, attracting a lower tax rate of 2.5%.

In response to the applicant's arguments and after considering the manufacturing process and raw materials used in producing the "Energy-G premium oil," the Authority for Advance Ruling ruled that the correct HSN Code for the product is 1518, as per Schedule I of Notification No. 1/2017-Central Tax (Rate). Consequently, the tax rate applicable to the product was determined to be 5%, in line with the classification under HSN 1518. The ruling clarified the tax implications for the applicant and provided a definitive classification for the product, ensuring compliance with the relevant tax regulations.

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